• by Paul Gough , October 21, 2003

A new report portrays the battle for online automotive advertising as a race that newspapers and dedicated Internet sites are winning at the expense of TV.

The Borrell Associates study, "Automotive Advertising: The Race for Online Position Heats Up," claims auto manufacturers are shifting tens of millions of dollars from TV branding campaigns to the Web. And local car dealers are spending up to two-thirds of their TV budget on Web applications.

Newspapers are certainly in the drivers' seat, with what Borrell Associates estimates as about $150 million in online auto ads in 2003 going to newspaper Web sites. The automotive category isn't a stranger to newspapers, either as a display ad or in the classifieds. Indeed, the auto category has been one of the bright spots in the employment-depressed classified category. It's natural to assume that much of the advertising has migrated to the Web. But Borrell Associates said about 25 percent is new advertising that wasn't shifted from print to the Web.

Coming in a strong second-place is AutoTrader.com, which has about $120 million in annual revenues. Portal sites are doing well among manufacturers who are employing rich media applications and car dealers are using local sites that drive feet into the showroom and hopefully wheels off the lot.

Who's losing in all of this? Local TV stations, which according to Borrell Associates are getting under $30 million in online auto ads. Two-thirds of local TV stations don't have much to offer advertisers in the automotive sector, the study said. But there's still time to shift out of neutral, the study said.

"To win in this advertising segment, local media companies must develop viable online solutions that promote a dealer's inventory, accept private-party car ads, and generate measurable leads for advertisers," the report said.

Or local stations risk stalling when they can least afford it.

For more information, visit www.borrellassociates.com.

-- Paul J. Gough